Multicultural Corner by Oscar Gonzales, Ph.D.
RISMEDIA, September 8, 2008-Turn on the nightly news, open the morning paper or click on your favorite news blog and the story of the current decline in the housing market and credit crisis is front and center. Indeed, we are entering “uncharted waters.” But what does it all mean to the growing multicultural markets that we believe will be the new economic power source for the housing market moving forward?
During the last 15 years, homeownership rates soared: the U.S. reached a homeownership rate of 75% and the gap for multicultural homeowners was closing at respectable rates. Today’s market conditions can potentially reverse that trend and leave one to question what will become of the multicultural consumer segment.
The Growing Demand: In 2006, multicultural home buyers made up 27% or $677 billion of all loan originations according to HMDA (Home Mortgage Disclosure Act).
Supply of Affordable Housing: Trends such as the influx of bank foreclosures into the market, the slowdown in housing starts-coupled with declining home prices-has created a supply of affordable housing stock that means new opportunities for multicultural home buyers who were left out of the market during the boom years when prices soared out of reach for this consumer segment.
New Loan Products in a Changing Regulatory Environment: The tightening of the credit markets has changed the landscape of conventional loan products available to many first-time home buyers and will mean less flexibility in down payments and underwriting guidelines. The migration to government-sponsored FHA financing has already become the order of the day for many, including the multicultural community.
The Real Estate Practitioner: Sales agents that stay in the business will require skill sets that they have not utilized in the past. Awareness of the new economic power source in the multicultural markets and learning the skills that are required for this consumer will be essential.
Reaching the multicultural consumer requires providing reliable products, prompt and responsive service, front-line staff that are empowered to resolve problems, knowledgeable staff, empathy with the customer and community trusteeship.
To be effective, your strategy requires understanding the psychographics of the various cultures to accommodate nuances and subtleties.
Oscar Gonzales is founder of the Gonzales Group, a business solutions and multicultural research firm for organizations in the real estate and financial services industry.
For more information, please visit www.thegonzalesgroup.com.